More Choice More Common in Medicaid Plans

by David Pittman David Pittman,Washington Correspondent, MedPage Today
July 09, 2013

WASHINGTON -- States are increasingly moving to privatized managed care programs for their Medicaid recipients as state lawmakers look to change the safety-net system despite objections from naysayers, members of Congress were told Monday.

Kansas, Louisiana, and, most recently, Florida have received federal OKs to offer expanded managed care programs that allow patients to choose from a list of plans with varying benefits.

"Patients like this choice, with 70% to 80% of Medicaid patients proactively choosing the plan rather than being automatically assigned to one," Bragdon told lawmakers.

States spend between a quarter and a third of their budgets on Medicaid, surpassing the amount spent on education, and they can expect that amount to grow under the Affordable Care Act's expansion program, which opens the program up to all those making up to 138% of the federal poverty level.

States like Florida, Louisiana, and Kansas can expect to save money, Bragdon said, making states like North Carolina, Texas, and Utah consider similar moves. The states believe they can generate greater savings through managed care for more expensive patient groups like the elderly and disabled.

The plans have risk-adjusted capitated rates so they earn more money to enroll sicker patients and have incentives to improve patients' health, Bragdon said. Competing for enrollment, plans are forced to improve benefit packages and improve access to specialists. Plans must publicly report outcomes and conduct consumer-satisfaction surveys annually.

In Louisiana, patients have the choice to opt back to traditional Medicaid. But of 900,000 Medicaid patients, only 3,000 took that option.

"The Florida reform pilot outperformed on health outcomes in 64% of the cases," Bragdon said.

But opponents of privatizing Medicaid cite a lack of accountability over the plans.

"The pilot program for Medicaid privatization [in Florida] was known as a real disaster," Rep. Kathy Castor (D-Fla.) said during Monday's hearing. "The state's own study condemned the results."

Several plans dropped out of the pilot citing an inability to make money, and patients complained of bouncing from plan to plan creating lapses in care.

She called the final waiver approved for the state-wide program "night and day" different from the pilot. The statewide program has new consumer protections, penalties for providers who back out, and medical loss ratios, Castor said.

All but three states have at least some Medicaid managed care in their state, and Weil said two-thirds of Medicaid patients receive most or all of their benefits through managed care.

"States are increasingly relying on mandatory managed care programs in Medicaid for more complex populations such as children with special healthcare needs and people of all ages with a variety of healthcare needs," Weil said.

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